The Parliamentary Under-Secretary of State for Work and Pensions (Esther McVey)
The Government are committed to enabling disabled people to fulfil their potential and play a full role in society. Crucial to that is the reform of disability living allowance, a lifeline for many but one that is simply not working in its current form. In the past 10 years, the number of people claiming rose by more than a third from around 2.4 million to 3.2 million and expenditure is now far in excess of initial estimated costs.
This year the Department for Work and Pensions expected to spend more than £13 billion on DLA. As a percentage of GDP, we spend a fifth more than the EU average on disability benefits and expect to spend more in real terms in 2015-16 than we did in 2009-10. Today we are publishing the Government’s consultation responses on the draft assessment criteria and on the detailed design of the personal independence payment. Alongside that, I will be laying in draft before Parliament the main PIP regulations, which will set out the PIP entitlement conditions, assessment criteria and payment rates. We will also publish in draft what the transitional arrangements might look like. The main scheme regulations are subject to the affirmative procedure and I look forward to debating them in full early next year.
Personal independence payments will be easier to understand and administer, financially sustainable and more objective. Throughout the whole development, we have consulted widely with disabled people and we have used their views to inform policy design and implementation plans. As a result of hearing those views, we have made several key changes to the final assessment criteria and I would like to thank the individuals and organisations who contributed.
Starting with the rates, I am pleased to confirm the rates for PIP will be set at the same rates as DLA. The daily living enhanced rate of PIP will be the same as the higher rate care component of DLA, and the standard rate of the daily living component will be set at the middle-rate DLA care component. The mobility rates of PIP will be the same as the DLA rates. Furthermore, following the autumn statement, disability benefits will be protected within our uprating measures and PIP, like DLA and carer’s allowance, will continue to be uprated by inflation.
The most important thing I want to announce today is that we have listened to and acted on the huge amount of consultation we have had with disabled people and disability groups. We have made specific key changes as a result of our engagement. They are outlined in full in our consultation responses and include broadening our approach to aids and appliances, assessing ability to read and taking account of specialist orientation aids that help mobility; mirroring the linking rules for DLA, which will help to ensure continuity for people with fluctuating conditions; and new plans for contacting young people when they reach the age of 16, or their appointees, to help a smooth transition to PIP.
All the changes we have made address the genuine concerns of disabled people and the organisations representing them. Overall, their effect is to make PIP more transparent, objective, and fair.
We also listened carefully to concerns about the speed of reassessments. To that end, we will now undertake a significantly slower reassessment timetable to ensure we get this right. It will be phased in, starting with a controlled start area in the north-west and parts of the north-east of England from April 2013. We will then take new claims nationally from June 2013. From October 2013, we will start reassessing people whose DLA award is due to end, people who report a change in their condition and young people who reach the age of 16. But now the peak period of reassessments will not start until October 2015. That means we can learn from the early introduction of PIP, testing our process and making sure the assessment is working correctly before we embark on higher volumes. We will then consider the findings of our first independent review, planned for 2014, and act on them. Importantly, unless people report a change in their condition, those with a lifetime or indefinite DLA award will not be reassessed until October 2015 at the earliest.
We can now publish case load assumptions about the impact of PIP. Those figures clearly show that PIP will deliver its key objective of focusing support on those with the greatest needs. By October 2015, we will have reassessed 560,000 claimants. Of those, 160,000 will get a reduced award and 170,000 will get no award, but 230,000 will get the same or more support. Under the new criteria, almost a quarter of PIP recipients will get both of the highest rates, worth £134.40 each week, compared with only 16% on DLA.
By reforming the system and ensuring that it is fit for the 21st century we can use the money we spend on disabled people more efficiently and effectively to help those most in need.
Mrs Anne McGuire (Stirling) (Lab)
I thank the Minister for her statement and for the advance copy of it.
Last Thursday we had the written announcement of the closure of Remploy factories, with more than 800 redundancies. This Thursday we have a statement that is intended, according to the Government’s own estimates, to remove a disability benefit from more than 500,000 disabled people. Let me make it clear that we are in favour of an assessment for DLA, but the assessment needs to be the right one.
I shall deal first with a number of myths. There has indeed been an increase in the number of people claiming DLA. A significant number of those have protected DLA as they move into retirement. As the Minister knows, about 900,000 people currently receiving DLA fall into this category. However, the other factor that I thought she might have alluded to was that the lives of disabled people have changed dramatically since 1992, when the expectation for many of them was that they would move into residential care. Thankfully, that is not the current situation when most disabled people want to live, as far as possible, independent lives in their own community, and DLA has been crucial for many disabled people as they move into that environment of independence, choice and control over their own lives.
I listened carefully to the Minister’s statement. In the short time available to us, I have not been able to scrutinise carefully the detail of the new assessment criteria, but I shall make some initial remarks. I welcome some of the changes that the Government have made, including the broadening of approach and the mirroring of the DLA linking rules. I welcome too the fact that the Government have recognised that the initial proposal on the speed of the assessment was unrealistic, and there will now be a significantly slower reassessment process. Nevertheless, we are still looking at June 2013 as the vesting date for new cases and we have not yet properly scrutinised the new criteria, so although I welcome the change in the speed of the assessment, I think there are still some issues about the new cases coming on in June 2013.
We will apply stringent tests to the new PIP assessments. Let me ask the Minister some specific questions. Given that DLA support allows many people to travel to work, will the Government give a commitment that it will not be taken away from anyone who is in work? In other words, if they are currently on DLA and are currently in employment, will the Minister give a commitment that the financial integrity of disabled people who go to work will not be undermined?
The Government are protecting under-16s and those over the age of 65, so how does the Minister’s claim that she is maintaining the overall budget square with that protection at each end of the age spectrum? If one looks at the demography, one clearly sees that there is a disproportionate impact on working-age disabled people. The Minister makes great play of the fact that the budget will remain the same, but I want to remind her of the comments made by her predecessor and other Members on the Front Bench, including the Secretary of State, that greater support would be given to those with the most severe disability. I wonder how that marries with the fact that the rates for the new PIP will be exactly the same as the current rates for DLA. That seems to be a conundrum.
The new criteria must not push people into social care or into the NHS. What discussions has the Minister had with the Department for Communities and Local Government, local government and the NHS to consider the impact as 500,000 people—over a longer period, admittedly—lose benefit?
May I also ask the Minister what the impact on carers will be? I think that there was a little confusion in her answers about carers on Monday, so I want to give her another opportunity. Carers UK estimates that 10,000 people who currently receive carers allowance could lose it as a result of the changes. Has she made any estimate?
I appreciate that this is a short statement so I will give a shortish response but I say once again to the Minister and to the Secretary of State that there is a whole raft of welfare reform changes that are impacting on the lives of disabled people. The Government have the facility and capacity, with hundreds of thousands of civil servants, so why do they not undertake a cumulative impact assessment of the effect of their changes on disabled people?
Esther McVey
I welcome the right hon. Lady’s words and her acknowledgment of the listening and consultation that we have done and the changes that we have made. I cannot give the assurances that she would like on PIP, as those were not the case for people of working age under DLA. What we can say is that everybody will be viewed as an individual when it comes to assessing their needs and that more people will get the higher awards—nearly 25% of those on PIP will be on the highest awards. As for carers, one thing we all agree on is that they do an incredible job. We will support them as best we can. I can also announce today that the links for carers that were in place under DLA will also be in place under PIP.
The Opposition never conducted a cumulative impact assessment when they were in government, and for good reason. I understand that it would be impossible to measure the impact of such large reforms and changes, particularly as they will not be in place until 2017 and the case load is dynamic. Even the Institute for Fiscal Studies says that it would be nearly impossible to do that. As I have said, I am delighted that we have listened to the disability groups, taken on board what they have said and made the changes they asked for.
Nigel Mills (Amber Valley) (Con)
Does the Minister welcome, as I do, the fairer way that fluctuating conditions, mental health conditions and cognitive impairments are assessed under PIP, in contrast to DLA, which tended to focus solely on physical impairment?
Esther McVey
I thank my hon. Friend, who quite rightly states that PIP is intended to look at fluctuating conditions, take all the impacts into assessment and deliver for those people.
Dame Anne Begg (Aberdeen South) (Lab)
I welcome the Government’s decision to delay the implementation of PIP and hope that they will continue to keep the timetable under review, because I suspect that it might not be as easy as the Minister implies it will be today. I advise her that she worries disabled people very much when she talks about the increase in the costs of DLA. Any increase in DLA, unlike for out-of-work benefits, is not necessarily a bad thing, because if more people are getting more DLA, more people are living independent lives and engaging in society in a way that they were not doing previously. Of course, any money spent on DLA or PIP is often money saved in other budgets, whether in the NHS or in social care. I ask the Minister to be very careful about the language she uses, because many disabled people are very worried about the implementation of PIP and what it will mean for their lives. Any words about saving money makes them think that they will be the victims of some kind of economic drive by the Government to ensure that they are saving on the budget for the very vulnerable. That money is spent very wisely on giving them an independent life.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Order. Just before the Minister answers, I remind Members that we must have much shorter questions, because I want to get everybody in.
Esther McVey
I thank the hon. Lady for her comments. I will of course be very aware of the language I use, and I hear what she says most clearly. I am glad that she is pleased about the slower delivery of PIP and about the independent review that will take place in 2014 so that we can ensure that what is happening is correct and that we are delivering what is intended. We continue to spend over £13 billion, and we will be spending more in every year up to 2015-16 than was spent in 2009-10. I am fully aware of her concerns and we have taken them on board.
Greg Mulholland (Leeds North West) (LD)
I welcome the changes to the descriptors for blind and deaf people and pay tribute to my hon. Friend the Member for Eastbourne (Stephen Lloyd), who has been working with the Department on this issue. These changes will enable blind and deaf people to access much more focused support for their conditions. Will the Minister outline that to the House?
Esther McVey
My hon. Friend is right. We listened and consulted, and we have made the alterations required for blind and deaf people in relation to their ability to communicate, make journeys, and so on.
Glenda Jackson (Hampstead and Kilburn) (Lab)
The Minister will be aware that the majority of the recipients of DLA/PIP and their carers are dependent on the services provided by local authorities. However, because of the Government’s savage financial cuts for local authorities, those services are being eroded or removed, or in some instances charged for. As part of the impact assessment, will she examine in no small detail whether the services that enable disabled people to live independent lives will still be available or whether the cost of buying them will become prohibitive?
Esther McVey
We are working with local government to ensure that we are delivering on this. It is about what is best for disabled people and focused support for the billions of pounds that we are spending.
Philip Davies (Shipley) (Con)
I welcome my hon. Friend’s statement. May I tell her to stick to her guns on this subject and ignore the siren voices from those on the Labour Benches who seem to believe in a test, but one that nobody can fail, and want to advocate unlimited levels of welfare? Given that we have limited resources, most of my constituents will support the principle that the money should be directed at the people who need it instead of at the people who do not, so may I urge her to continue along that path?
Esther McVey
I thank my hon. Friend. This is a principled reform. It is about adding integrity and rigour to the system. It is about fairness and transparency, and helping those who need this support the most.
Mr David Blunkett (Sheffield, Brightside and Hillsborough) (Lab)
I think that the comment by the hon. Member for Shipley (Philip Davies) was a disgrace.
May I suggest to the Minister that we will not fully understand the impact of her announcement until we see the revised assessment criteria? Welcome as they are for blind and deaf people, will they have the continuing perversity of penalising blind people for having a go at undertaking journeys that they could undertake with DLA but could not undertake unless they had the support that PIP is intended to provide for them? In other words, will they avoid the perversity that was built into the previous assessment criteria and, above all, continue with the higher rate of the mobility component, which was unanimously agreed by this House just two and a half years ago and was threatened under the previous draft assessment regulations for PIP?
Esther McVey
I will continue to engage with the right hon. Gentleman; we met only yesterday. We inherited a confused system in which over 50% of people did not have medical support for their claims and 71% of people were left on indefinite awards. We want to engage with people and ensure that those who are most in need of support will get it. We do not want to penalise anybody who is trying their best. It is not about that; it is about offering support where it is most needed.
Steve Baker (Wycombe) (Con)
Will my hon. Friend confirm that the Government will spend about £50 billion on services and benefits for disabled people, and will she set out how that compares and contrasts with similar countries?
Esther McVey
I can indeed confirm that my hon. Friend is right. We continue to spend £50 billion a year on support for disabled people, which is a fifth higher than the EU average. We are a world leader in how we deal with people with disabilities.
Mr Nigel Dodds (Belfast North) (DUP)
I welcome the statement and the delay in the movement of customers with indefinite awards for 21 months. That is a sign of listening to people’s concerns. Will the Minister reassure me that she and the Department will continue to work closely with the Department for Social Development in Northern Ireland, given the concerns in that part of the United Kingdom about the impact of some of these reforms, particularly in deprived areas?
Esther McVey
I welcome the right hon. Gentleman’s words. I will indeed work closely with the social development agency and I will be going to Ireland in the not-too-distant future.
Duncan Hames (Chippenham) (LD)
I thank the hon. Lady for keeping her predecessor’s promise to maintain the mobility component in the new PIP and not to take it away from local authority care home residents. She is listening and the Government are clearly learning from the experience of the work capability assessment. Who will she be listening to in the review of the early experience of her proposed new personal independence payments, in order to ensure that, when more people are transferred to PIP in 2015, we get the process right?
Esther McVey
I thank my hon. Friend for his question. We have been listening for the past 18 months. We have consulted all disability groups and disabled people and have engaged with absolutely everyone. We will continue to do that. There will be an independent review in 2014 and we will adjust, listen and do what we need to do to ensure that we deliver the correct benefit.
Natascha Engel (North East Derbyshire) (Lab)
The House of Commons Library note on the personal independence payment has a large section on how seriously injured armed forces personnel and veterans will be affected. The Minister’s statement was silent on that. Will she outline how that group will be affected and, most importantly, will she define what is meant by “seriously injured”, because unless that is clearly defined they could simply be weasel words?
Esther McVey
I thank the hon. Lady for her question. That was not in my statement because it will come under a separate system under the Ministry of Defence. The support will be there and it will come through a different system.
Nick de Bois (Enfield North) (Con)
I, like everyone in this House, have tremendous respect for the work done by carers. For the sake of clarity, will the Minister confirm that the rules linking carers allowance to PIP will be exactly the same as those for the DLA?
Fiona Mactaggart (Slough) (Lab)
Given the Minister’s announcement that, although 230,000 will get the same or more support, 330,000 people will get no or less support, I assume that there will be a large number of appeals. At the moment, people who are appealing against rulings on the employment and support allowance in my constituency—80% of them are successful—are waiting for more than a year for their appeals to be heard. Is the Minister able to give any guarantee on how long the appeals against refusal of DLA will take? Will she set a maximum length of time and tell us that there will be enough staff to open the envelopes from people who make appeals, let alone administer them, which is not what is happening at present with ESA appeals?
Esther McVey
I recognise the points made by the hon. Lady. We will speed up the process. We have commitments from the Justice Department that it will have enough staff in place, and we will do this as best we can.
Mr Peter Bone (Wellingborough) (Con)
I will follow on from the hon. Member for Slough (Fiona Mactaggart), because she raised a real issue. Every Member in this House will have had that problem in their constituency. Although the whole House welcomes what the Government are trying to do, there is a practical problem with appeals. Will the Minister at least look into that a little further?
Esther McVey
My hon. Friend is correct that that is a priority for us. However, I reiterate that this is a completely different system. PIP is a brand-new system and a brand-new benefit. It has new localised systems and it will be delivered locally. Therefore, it has been created in a much better format.
Nick Smith (Blaenau Gwent) (Lab)
What is the Minister’s estimate of the number of people on carer’s allowance who will lose out after this statement?
Esther McVey
As it stands, the same number of people will be on carer’s allowance, although they might be different people. As at the moment, people will be assessed and reassessed, and some people will move from having carer’s allowance to not having it, but the overall number will stay roughly the same.
Martin Vickers (Cleethorpes) (Con)
I welcome the Minister’s statement. Clearly, the Government have listened to the concerns of disabled people and made the appropriate changes. I particularly welcome the new timetable, which I hope will ensure that PIP is delivered correctly. Of course, an extended timetable also leads to anxiety and uncertainty among the recipients of the benefit. Will she assure me that everything possible will be done to ensure that individuals, through the various agencies and support groups, know exactly what their situation is?
Esther McVey
I can confirm that. What we are doing is all about a smooth transition and getting the implementation correct.
Mr William Bain (Glasgow North East) (Lab)
When my right hon. Friends the Members for Stirling (Mrs McGuire) and for Birmingham, Hodge Hill (Mr Byrne) and I met members of the disability community in Scotland recently in my constituency, they expressed concerns that tens of thousands of disabled people in Scotland might lose their access to passported benefits and their ability to get to work under the new system. With disabled unemployment at a record high, would it not be wrong to create new barriers to disabled people keeping their jobs? Will the Minister guarantee that no disabled person who is currently in work will be worse off as a result of these reforms?
Esther McVey
As the hon. Gentleman will know, it has always been the case under DLA that when people are reassessed, some people stay on the same benefit, some people get more and some people get less. That will be exactly the same under PIP. The difference is that there was no systematic review under DLA, but there will be under PIP.
Mike Crockart (Edinburgh West) (LD)
An answer that I received to a recent parliamentary question indicated that between October 2008 and May 2012, 59% of initial work capability assessments for employment and support allowance resulted in those being assessed being awarded no points at all. Will the Minister assure me and the many recipients of DLA in Edinburgh West that all possible efforts are being made to ensure that the design and delivery of the assessments for PIPs will ensure that more decisions are correct the first time around?
Esther McVey
Let me reiterate once again that this is a totally different system to ESA. It is a totally different benefit altogether. In fact, we inherited ESA from the previous Government. It was wrong in 2009 and we have put in place many steps to improve the system, including putting it through three reviews. I assure my hon. Friend that we have listened to the various disability groups and organisations, and that we will get this right.
Diana Johnson (Kingston upon Hull North) (Lab)
We have put men on the moon, so I do not understand it when the Minister says that it is impossible to do a cumulative impact assessment. Surely that is not beyond the wit of the hundreds of civil servants sitting in her Department.
Esther McVey
The hon. Lady is right that we have put men on the moon. However, she will also know that her Government never did such an impact assessment, and for good reason. On such wide-ranging reforms, it is impossible to make an accurate assessment. That is particularly the case with these reforms because they will not be in place until 2017-18 and there is such a dynamic case load. Even the Institute for Fiscal Studies says that it would be near impossible.
Bill Esterson (Sefton Central) (Lab)
I am glad the Minister was able to confirm that we have put a man on the moon.
Let me return to the point about appeals, which is crucial. Surely if we get the assessment process right and it is fair, there will be no need for appeals and we will not see so many disabled people coming to my surgery—and those of Members across the House—who are worried about their financial futures.
Esther McVey
All sides of the House wanted reform. Everybody said that reform was right, but the difference is that this Government are making that reform to ensure we have a benefit that is fair and correct, right for the 21st century, and that has rigour put into it.
Mr Deputy Speaker (Mr Lindsay Hoyle)
Last, but certainly not least, Julie Hilling.
Julie Hilling (Bolton West) (Lab)
I, too, am really shocked that the Minister is not going to carry out an impact assessment, and I wonder whether she will answer the question this time. Will blind people get the equivalent of the higher-rate mobility component of DLA?
Esther McVey
Every individual will be assessed on their individual needs. We have taken significant soundings and listened to all the various groups. Each person will get the benefit that they require.
Bill presented
Succession to the Crown Bill
Presentation and First Reading (Standing Order No. 57)
The Deputy Prime Minister, supported by the Prime Minister, Secretary William Hague, Mr Chancellor of the Exchequer, Secretary Vince Cable, Mr Secretary Moore, Danny Alexander and Miss Chloe Smith, presented a Bill to make succession to the Crown not depend on gender; to make provision about Royal Marriages; and for connected purposes.
Bill read the First time; to be read a Second time on Monday 17 December 2012, and to be printed (Bill 110) with explanatory notes (Bill 110-EN).